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Socialist Voice Readers Debate China

by Ian Angus
In recent weeks an intense discussion of the Chinese state and economy has attracted record numbers of visitors to the Socialist Voice website. They’ve been following an extended debate on whether capitalism has been definitively restored in China, and whether China is pursuing imperialist policies in the Third World.

Unlike many online discussions, this one has been notable for well-argued and thoughtful contributions, and, on the whole, for a tone of mutual respect among the participants, despite their political differences. All of the contributions are well worth reading.

For the benefit of readers who have not been following the debate, this article offers a brief summary of the principal issues under discussion, together with links to the main contributions.

Background

The discussion actually began last April, with John Riddell’s article, 50 Years After: The Tragedy of China’s ‘Great Leap Forward’. Describing the Chinese Revolution of 1949 as a victory that “laid the foundation for China’s present dynamism and influence, as well as providing an enormous impetus to anti-colonial revolution worldwide,” Riddell suggested that the so-called “Great Leap Forward” of 1958-59 undermined the revolution’s gains.

“The architects of the Great Leap hoped that its arbitrary, coercive, and destructive character would be justified by a jump in production. This, they hoped, would create the preconditions for a truly just society. However, the resulting collapse of production is strong evidence that socialist policies must not destroy but build on worker and peasant culture, wisdom, initiative, and control – what the Venezuelan revolutionists today call ‘protagonism.’

Riddell’s article prompted comments from Walter Lippmann and Herman Rosenfeld. Hoping to involve more readers in the discussion, we reposted some of these comments, with Riddell’s replies, as a separate article, Socialists and China: An Exchange, on January 10.

Other readers did indeed join in. The discussion has been wide-ranging, including contributions on the relevance of the Trotskyist theory of “Permanent Revolution,” and on Fidel Castro’s public statements about China, but for the most part it has focused on two main topics.

Is China a Bourgeois State or a Workers’ State?
Praba argues that China remains a workers state, while Chris Slee says the Chinese state can no longer be described as working-class in character.

Among their disagreements is the class nature of the Chinese leaders who have pressed for reforms in the interests of working people; Praba calls them “pro-communist elements,” while Slee says they are “bourgeois nationalists.”

Fred Feldman says that despite the damage done by the Great Leap Forward and the Cultural Revolution, the “anti-imperialist and anti-capitalist foundations created by the great Chinese revolution” have not been destroyed.

Is China Imperialist?In a parallel discussion, Dimitris Fasfalis and Fred Feldman have been debating whether China is imperialist, as Marxists use that term. Fasfalis argues that it is, citing China’s investments and other activities in Africa.

Feldman replies that despite its economic growth, China remains an oppressed and dependent nation that socialists should defend against North American and European imperialism.

To follow the discussion as it has taken place to date, simply go to the January 10 article and scroll down through the article and comments.

The disadvantage of that method is that the Comments appear in chronological order, so the various topics are intermingled. Readers who wish to follow the two main threads may find the following outline useful. The quotes merely illustrate key arguments: follow the links to read each comment in full.

IS CHINA A BOURGEOIS STATE OR A WORKERS’ STATE?

Praba: “The PRC remains a workers state (although one where there has been dangerous levels of capitalist penetration). The attitude of socialists to the PRC must be one of overwhelming solidarity while opposing any rightist tendencies within the ruling party.”

Riddell: “The fact that capitalist accumulation is so prominent in the Chinese economy today does not imply, in my opinion, that the Chinese state is necessarily bourgeois.”

Slee: “China’s rapid economic growth is in part due to the decision of many transnational corporations to make China their main base for the export of goods to the world market. … They believed that the Deng Xiaoping regime was a reliable pro-capitalist government.”

Slee: “My current view is that these changes are reforms within capitalism, rather than the start of a renewed drive towards socialism.… However, if we were to see a deepening of these progressive measures in coming years, I would have to look again at how I analyse the situation.”

Praba: “The notion that China’s rapid development is primarily due to foreign investment is in good part a Western media myth. The main reason for the PRC’s economic success has been the dominance of its economy by large state-owned enterprises.”

Lippmann: “Where else in the capitalist world in today’s era of neo-liberal globalization are capitalist governments giving workers more rights, encouraging more unionization and creating new welfare systems to replace old ones destroyed by privatization?”

Slee: “During the 1990s, the Chinese bureaucracy lost its fear of the working class sufficiently to carry out massive privatisation. The subsequent rise of working class struggle revived that fear a bit, causing the partial reversal of some neoliberal policies. Whether the predominance of capitalist relations of production will be overturned remains to be seen.”

Slee: “We should remember that it was the CP government (under a previous leadership) that created the problems which the current leadership is trying to ameliorate. Secondly, the reforms adopted so far don’t solve all the problems which the previous policies created.”

Praba: “The question of the class nature of the state power that holds sway in the world’s most populous country is a critical one. It is a question not of academic importance but a question that shapes what attitude socialists in the West should take to the PRC state – hostility or solidarity.”

Slee: “A strong state sector does not necessarily prove the existence of a workers state. Iraq under Saddam Hussein had a strong state sector, but the state served the interests of the Iraqi capitalist class.”

IS CHINA IMPERIALIST?

Riddell: “China is often called imperialist, but I don’t see the evidence. … The Chinese state does not appear to need at present to conquer spheres of influence and assert its economic and political domination over client states and semi-colonies.”

Fasfalis: “The evidence … of Chinese imperialistic policies exists: Chinese foreign direct investments in African countries such as Angola, Sudan, the Democratic Republic of Congo, Cameroun and Nigeria are designed to secure, thus to control, energy and mineral supplies.”

Feldman: “Dimitris’ unproven claim that China is engaging in unequal exchange with African countries would not prove that China was an imperialist power even if Dimitris proved it to be a fact that China was engaged in unequal exchange with some or all of them.”

Fasfalis: “It is not the unequal terms of exchange that make China an imperialist state. It is rather the fact that its investments abroad (emanating from public or private companies) are searching to establish in some cases a control on its hosts.”

The discussion continues…

Socialist Voice is pleased to be hosting this debate. We encourage other readers to participate, using the Comments box below.

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9 thoughts on “Socialist Voice Readers Debate China”

If things are as bad in China as some on the left would have us believe, some even arguing that China – without a single soldier outside its national territory – has even become imperialist, how frightening would news like this be: http://groups.yahoo.com/group/CubaNews/message/111701

Everything these contributores see is no good today. Completely omitted is any understanding about how the People’s Republic of China became a powerhouse to which capitalist countries such as the United States of America are profoundly in debt. This is a factor which gives third world countries such as Cuba, Venezuela and Iran, among many others some political and economic elbow room. Western powers have never forgiven China’s break free to social, economic and political independence. Whether you call China capitalist, state-capitalist, bureaucratic collectivist or a bureaucratically-deformed workers state, the western capitalist powers couldn’t care less. They resent China’s independence, regardless of what form that independence takes.

Walter Lippmann
Los Angeles, California
================================================
2010: All roads lead to China: A Cuban researcher reflects on the challenges and prospects facing the Asian giant.

Please forgive the brevity. I have much more on my mind, but the technological difficulties here in Cuba make that quite a challenge for now. I’d like to add another few short points to the discussion.

As the imperialist campaign against China continues to heat up, with Obama seeing the Dalai Lama, Washington selling more weapons to Taiwan and so on, it’s essential that socialists keep in mind which side they are on in the world struggle today. I still think the traditional Trotskyist designation of China as a bureaucratically-deformed workers state is a good approximation of what China is in 2010. Further, it’s essential to look at China as well in the context of both the imperialist propaganda campaign, which includes its racist “yellow peril” elements.

Here are two thoughtful comments which are linked below, one from the Cuban Juventud Rebelde site, the other from the Communist Party, USA, which maintains a strongly pro-China political position.

JR’s correspondent, Nyliam Vasquez, is recently back from a two year stint in China:

Praba says “In his last posting, Chris Slee states that, “In the 1990s the Chinese government was in many ways one of the most extreme neoliberal governments in the world.”

“After Deng’s Southern tour in 1992, the PRC government indeed moved to the right and privatized many smaller enterprises. Yet the PRC’s strategic economic sectors remained state controlled. Slee’s claim is therefore a serious exaggeration. How can one describe a government that presides over a state sector that controls more than half the economy and owns all major banks, oil/gas companies, steel firms, telecommunications, auto manufacturers, shipping, aviation etc as “one of the most extreme neoliberal governments in the world.” In that case you would have to say that the Chavez government is an even more neoliberal government and so too the government of Vietnam.”

The key differerence between the Chavez government today and the Chinese government led by Deng Xiaoping in the 1990s is the different direction of motion. China at that time was carrying out a policy of rapid privatisation, sackings from state owned enterprises, attacks on the affordability of health care, etc. Chavez is doing the opposite.

Praba says: “It is of course true as Slee says that the time taken to recover from defeat depends on a range of national and international factors. However, the period after which Slee says China suffered a counterrevolution was overall a period of setbacks for the international workers movement, a period of concerted capitalist offensive.”

While the general international climate during the 1990s was indeed one of “capitalist offensive”, towards the end of that decade and into the 2000s there were the beginnings of some counter-trends, including numerous mass protests against corporate globalisation (in Seattle, Melbourne, etc), and the rise of popular struggles in Latin America, resulting in the election of Chavez, Morales, etc and the deepening revolutionary processes in Venezuela and Bolivia.

Praba says: “It is notable that in none of the ex-Soviet and Eastern European countries that suffered a counterrevolution (which occurred several years before Slee claims that capitalist restoration took place in China) has the class struggle even to this day recovered to a point where the proletariat is able to wrest significant concessions from the capitalists and force them into renationalisations. Instead many of these countries are continuing to see the growth of far-right forces. It is just not plausible that in the rectionary international political climate that existed at the start of the 21st century, a Chinese working class that just lost state power could have recovered in such a very short period so as to go on the offensive and win important concessions.”

There have been some militant struggles and some renationalisations in Russia. But it is true that resistance to neoliberal policies has been more intense in China than in Russia. Perhaps the more recent memory of the horrors of pre-revolutionary society may have strengthened people’s resolve to oppose attacks on the gains of the revolution.

In Eastern Europe there are still illusions that because these countries are “part of Europe” they will eventually share in the prosperity of Western Europe.

Praba says: “However, if, as Slee acknowledges, progressive changes occurred in China from about 2000, then the supposed journey towards complete capitalist restoration – posited by Green Left Weekly as still being travelled on well into the 21st century – cannot have made it to its endpoint. So where does that leave China – in some limbo for the last ten years where the workers state has been smashed but a capitalist state has not been consolidated?”

After 1989, forces favouring the restoration of capitalism gained the upper hand within the state apparatus. They used their power to carry out large scale privatisation.

But privatisation was incomplete, partly because of popular resistance, partly due to the existence of a faction within the Communist Party that favoured maintaining a significant state sector of the economy, so that China could remain relatively independent of the imperialist powers.

While I consider that the latter faction is bourgeois-nationalist rather than socialist, the rise of mass struggle did play an important role in strengthening its position relative to the neoliberals.

Praba says: “Thirdly, by admitting that the state sector will invest “regardless of the level of class struggle” -and that means irrespective of concessions made to such struggle – Slee is in effect admitting that China’s state sector is not decisively shaped by the rate of extraction of surplus value from labour. And that is certainly the case. Over the last four years, wages is China (including those of migrant workers) have grown at a spectacular annual average rate of 15-20% – about twice the rate of growth of the economy itself. Yet investment (mostly by the state) has continued to massively increase.”

It is true that wages have risen rapidly in the last few years. But this was starting from a very low base. The rate of exploitation still remains very high.

Praba admits that: “There are problems in China caused by the economic inequalities between ethnic groups resulting from the post-1978 reforms and also concerning the degree of Han chauvinism”.

But he denies that there was any Han chauvinism in the pro-China demonstrations at the Olympic torch relay: “In contrast within the pro-PRC demonstrations at the torch relay there were no slogans attacking ethnic Tibetans as a people and few if any slogans referring to Han identity at all – indeed any impulses amongst some towards such displays of Han chauvinism would likely have met with stern opposition from the Communist Youth League organisers. Instead, the main line of the demonstration was “China: 56 Ethnic Groups, One Family.””

The claim that the 56 ethnic groups are “one family” sweeps under the carpet the problem of national oppression.

Language is a key issue. In Tibet, Chinese (Mandarin) is the main language used in government and in the upper levels of the education system. The Tibetan language has a secondary status. This puts Tibetan speakers at a disadvantage in getting jobs. The higher paid jobs are disproportionately held by Han Chinese.

In addition, private sector enterprises in Tibetan cities are predominantly owned by non-Tibetans. For example, the majority of travel agencies, hotels and shops belong to Chinese, thus denying Tibetans much of the benefit from the growing numbers of tourists (who mainly come from China).

At times there have been attempts to ameliorate the problem. In 1987 a policy of moving towards equality for the Tibetan and Chinese languages was adopted. But in the 1990s this policy was effectively abandoned. Currently primary education is generally conducted in Tibetan, but secondary and university education is mainly conducted in Mandarin. Many Tibetan speakers are illiterate. (See “Authenticating Tibet”, edited by Anne-Marie Blondeau and Katia Buffetrille, University of California Press 2008, especially p. 234-6)

Praba says: “In general had India been granted the Olympics there would not have been such a concerted effort to disrupt the torch relay whipped up by the Western capitalist media and backed by the U.S. National Endowment for Democracy and equivalent German organisations. Why? Because India is capitalist and the imperialist bourgeoisies’ accept its murderous occupation of Kashmir.”

The imperialist media does not confine itself to attacking workers states. It also attacks bourgeois-nationalist regimes such as that of Iran. I am sure that if the Olympic games were held in Iran the imperialist media would support protests aimed at embarrassing the Iranian government.

In his last posting, Chris Slee states that, “In the 1990s the Chinese government was in many ways one of the most extreme neoliberal governments in the world.”

After Deng’s Southern tour in 1992, the PRC government indeed moved to the right and privatized many smaller enterprises. Yet the PRC’s strategic economic sectors remained state controlled. Slee’s claim is therefore a serious exaggeration. How can one describe a government that presides over a state sector that controls more than half the economy and owns all major banks, oil/gas companies, steel firms, telecommunications, auto manufacturers, shipping, aviation etc as “one of the most extreme neoliberal governments in the world.” In that case you would have to say that the Chavez government is an even more neoliberal government and so too the government of Vietnam.

By the way the state’s share of GDP in Vietnam today (officially 36%) is not only lower than China’s was in the 1990s but is lower than it is in China today. Does Chris Slee think that the Vietnamese government was/is also “one of the most extreme neoliberal governments in the world” and that a capitalist counterrevolution has taken place there (I do not think this by the way)? If not, then what is his reason for looking at Vietnam in a different way to China?

Furthermore, if one claims that “in the 1990s the Chinese government was in many ways one of the most extreme neoliberal governments in the world” then one is painting a rather glossy picture of neoliberalism. For during this period China continued to pull hundreds of millions of people out of poverty. Indeed during a period of supposed “extreme neoliberalism” from 1992 to 2002, the number of children underweight or stunted due to malnourishment in China halved. By 2002 China had reached its Millenium Development Goal – 13 years ahead of target! (see again http://www.ifpri.org/sites/default/files/publications/beijingbrief_svedberg.pdf). I do not believe that neoliberalism is capable of such achievements in poverty reduction – indeed quite the opposite. Just take a look at how little capitalist India has done in poverty reduction in the 1990s and since.

Chris Slee states that, “The ranks of China’s US dollar billionaires have swelled from three to 130 in just five years”, according to the Melbourne Age’s China correspondent John Garnaut (The Age, October 14, 2009). (The fact that some of these billionaires have finished up in jail is not unique to China. The same has happened in Russia under Putin).”

It is wrong to compare the jailing of a very small number of billionaires who have fallen afoul of Putin in Russia with the much more widespread jailing of tycoons in China. In China the jailing of the ultra-rich usually comes not because of their wrong political allegiances but because of public pressure, often following exposure of their wealth. That is why there is a hot selling book out in China called the “The Curse of Forbes” – it is about the fact that if you get on Forbes magazine’s China rich list you could be in big trouble. In 2006, capitalists were so fearful of appearing on the Hurun (a rival rich list to Forbes) list – since so many who appeared on the previous lists ended up in jail – that some had offered up to US$50,000 to the magazine to drop them from the list!

And what of the man who was second to Huang on that 2008 rich list, steel magnate Du Shuanghua. Well Du was last year FORCED to sell off 67% of his steel firm – China’s biggest privately owned steel firm – Rizhao Iron and Steel to state-owned Shandong Iron and Steel. The price offered to him was much lower than the share market price so this was in part a nationalisation without compensation.

Thus although far too many capitalists have been able to ride high in China in the post-1978 period, the “right” to capitalist property there is far from guaranteed. Indeed this is a common complaint of the anti-PRC, “pro-democracy” forces. Here is a quote from the Sep-Oct 2006 issue of an anti-PRC magazine in Australia, called New Land:
“It seems that as soon as Forbes magazine publishes the roster of China’s richest people, all attention focuses on how they made their money.
“… The wealthy, who seem to be influential and powerful; and are on top of the world, one day might be toppled and be nothing tomorrow, often ending up in prison.”

A point had been made that the intensity of Chinese workers struggles (which Slee admits to having taken place since 2000) over the last 15 years shows that the Chinese working class has not been the highly demoralized class you would expect to see had it suffered such a catastrophic defeat as the loss of state power. In response, Slee states that: “The time taken to recover from a defeat is not fixed. It depends on a range of national and international factors. For example, it was only a few years after the defeat of the 1905 revolution in Russia that a new wave of workers struggles began.”

Actually the next wave of workers struggle in Russia after 1905 did not begin until 1912. The defeat of the attempted 1905 revolution was a huge defeat for the Russian workers that led to a period of dark reaction. However, because the struggle reached revolutionary proportions before it was defeated, it gave the advanced layers of the toilers a sense of their own power and potential. That is why Lenin described it as a “dress rehearsal” for the 1917 October Revolution. The 1905 defeat was the defeat of an offensive, advancing struggle. In contrast, if the Chinese working class lost state power then that would mean the toilers losing what they already had, what they had held for the previous several decades. This would therefore be an even more demoralising defeat than the defeat of 1905 in Russia. It would be a defeat that would lead to massive demoralization within the working class, the growth of ultra-rightist tendencies, and atomisation of the class. This does not at all describe the state of the Chinese working class in the period immediately after which the supposed “counterrevolution” took place.

It is of course true as Slee says that the time taken to recover from defeat depends on a range of national and international factors. However, the period after which Slee says China suffered a counterrevolution was overall a period of setbacks for the international workers movement, a period of concerted capitalist offensive. It is notable that in none of the ex-Soviet and Eastern European countries that suffered a counterrevolution (which occurred several years before Slee claims that capitalist restoration took place in China) has the class struggle even to this day recovered to a point where the proletariat is able to wrest significant concessions from the capitalists and force them into renationalisations. Instead many of these countries are continuing to see the growth of far-right forces. It is just not plausible that in the rectionary international political climate that existed at the start of the 21st century, a Chinese working class that just lost state power could have recovered in such a very short period so as to go on the offensive and win important concessions.

I made a point previously that the tendency which Chris Slee supports was well into the 21st century declaring that steps were occurring to move China further towards capitalism – in other words it was basing itself on the notion that the capitalist counterrevolution was then (i.e. in the 21st century) still in the process of being completed. In response Slee states that, “I agree that the DSP was slow to recognise the beginnings of progressive change in China after about the year 2000.”

Chris Slee here misunderstands the point that was being made. The point was not about the DSP failing to recognise “the beginnings of progressive change in China after about the year 2000” nor was it really about the DSP at all. The point rather was to show how it is not possible to rationally both accept that progressive change has been occurring in China since 2000 and at the same time claim that China had just soon before this had a counterrevolution which was still being completed in the 21st century. For if a counterrevolution is in the process of being completed this can hardly be associated with progressive change. The consolidation of capitalist state power is not a time where one sees concessions to the masses or heightened class struggle. Just look at what it meant to the people of the ex-USSR!

Now, one way that people who acknowledge that there has been progressive change in China since 2000 could simultaneously try to claim that China went on a sure path back towards capitalism from the 1990s is if they retrospectively adjust their analysis to now say that this “capitalist restoration” had been completely consolidated by the end of the 20th century. Yet this would be an outlandish claim that has no relation to social reality in China. That is why most left groups that claimed that China went capitalist in the 1990s also added that the counterrevolution was still in the process of being completed in subsequent years. For example the Green Left Weekly article referred to earlier from 2006 spoke of pro-capitalist economists, legal experts and government advisers demanding that China embark on a course of “political reform,” that the ideological constraints on capitalist restoration be removed and that the military be taken away from Communist Party command. However, if, as Slee acknowledges, progressive changes occurred in China from about 2000, then the supposed journey towards complete capitalist restoration – posited by Green Left Weekly as still being travelled on well into the 21st century – cannot have made it to its endpoint. So where does that leave China – in some limbo for the last ten years where the workers state has been smashed but a capitalist state has not been consolidated? That would be nonsensical in terms of the Leninist understanding of the state – especially given that China in the first decade of the 21st century was not a highly unstable country that was torn to shreds by violent political conflict. The truth is that the PRC has remained a workers state albeit one that is seriously endangered by counterrevolutionary forces.

In an earlier posting I explained that, “in real capitalist countries when workers struggle is strong enough to win concessions from the capitalists it leads to a loss of business confidence, to lethargy from those running the economy and especially to a collapse in business investment…. Yet in China, in the very period when Slee says that the workers `fightback’ is `winning concessions’, we are seeing the very opposite. There is great economic dynamism and massive investment.” In response, Chris Slee says that, “In a country with a strong state sector of the economy, the government is sometimes able to simply order state-owned enterprises to invest, and state-owned banks to lend money, regardless of conditions on the world market, and regardless of the level of class struggle, etc.”

Let us consider the implications of Slee’s response. Firstly, by responding to a statement about the ability of the PRC economy to power ahead with the point that it has a strong state sector, Slee is not only accepting that China has “a strong state sector” but is, without meaning to, admitting that this state sector DETERMINES THE OVERALL FATE OF HER ECONOMY, i.e. it plays the DECISIVE role in China’s economy. This is a step forward, for in earlier postings while admitting that China has a strong state sector, Slee downplayed the continued strategic dominance of the state sector.

Secondly, by saying that in China’s economy, “the government is sometimes able to simply order state-owned enterprises to invest, and state-owned banks to lend money, regardless of conditions on the world market,” Slee is admitting that ultimately the state sector is not beholden to market imperatives, i.e. it does not in the end run on the profit motive.

Thirdly, by admitting that the state sector will invest “regardless of the level of class struggle” -and that means irrespective of concessions made to such struggle – Slee is in effect admitting that China’s state sector is not decisively shaped by the rate of extraction of surplus value from labour. And that is certainly the case. Over the last four years, wages is China (including those of migrant workers) have grown at a spectacular annual average rate of 15-20% – about twice the rate of growth of the economy itself. Yet investment (mostly by the state) has continued to massively increase.

Now put all these things together. What do you call an economy where the state sector plays the decisive role, where that state sector is not beholden to the profit motive and where it can still motor on regardless of the rate of extraction of surplus value from labour? You call it a socialistic dominated economy (albeit in this case one that is significantly deformed by corruption, capitalist penetration and bureaucratism).

Slee says that, “Marxists should aim to educate members of the Han Chinese majority about the reasons why Tibetans and Uighurs feel oppressed, and why some of them want to break away from China and establish independent states.”

There are problems in China caused by the economic inequalities between ethnic groups resulting from the pro-1978 reforms and also concerning a degree of Han chauvinism. However, the U.S.-backed forces pushing for “independence” of Tibet and East Turkestan (Uighur) are motivated mainly by a drive to overthrow socialistic rule. They are using the cover of separatism to mask their desire to change the social system. The pro-Dalai Lama forces, for example, long for the days when the monks and other aristocrats lorded it over horribly oppressed slaves and serfs. They hate the liberated serfs and slaves and their descendants who dominate the government of the Tibetan Autonomous Region of the PRC as much as they hate the ethnic Chinese communists. For more on this see the following article written shortly after the pro-Dalai Lama riots in Tibet in March 2008: http://web.aanet.com.au/tplatform/Open_Letter.html

In response to details about the massive pro-PRC demonstrations that accompanied the Beijing Olympics torch relay in Australia in April 2008, Slee says that, “The pro-China demonstrations were essentially nationalist, regardless of the color of the flags.”

This is a big oversimplification. The demonstrations were a mixture of Chinese nationalism with pro-communist sentiment, where people were proud of the achievements of socialism in China.

Furthermore, the “colour of the flags,” while they are not in themselves decisive, do tell you something about the character of events. Indeed the tendency that Slee supports has previously recognised this. In 2006, the DSP was actively involved in a campaign against a decision by a local government (Fairfield) in Sydney to raise the defunct flag of the old capitalist South Vietnam. This was a good work by the DSP and the group that I support, Trotskyist Platform (then newly born) also participated in this campaign. However, Slee must here downplay the political significance of flags, because at the torch relay not only were the pro-PRC forces carrying the communist red, five-star flags but the anti-PRC sections of the crowd were adorned with great numbers of the defunct South Vietnam capitalist flags, the very same flag that the DSP had previously opposed.

Continuing on a point about the events surrounding the torch relay, Slee claims that, “If the Olympics had been held in India, and if Kashmiri activists had disrupted the torch relay, there would probably have been big pro-India demonstrations in Australia, greatly outnumbering the Kashmiri protestors (given the relative numbers of Indians and Kashmiris living in Australia).”

Firstly, it is worth noting that there have been anti-independence demonstrations in India over the Kashmir issue. However, they take on a very different character to the pro-PRC mobilisations over Tibet – both those in China and abroad. The demonstrations in India are often led by right-wing Hindu chauvinists and are shot through with vile insults against Muslims. They are sometimes a precursor to actual anti-Muslim violence and historically even massive pogroms. In contrast within the pro-PRC demonstrations at the torch relay there were no slogans attacking ethnic Tibetans as a people and few if any slogans referring to Han identity at all – indeed any impulses amongst some towards such displays of Han chauvinism would likely have met with stern opposition from the Communist Youth League organisers. Instead, the main line of the demonstration was “China: 56 Ethnic Groups, One Family.”

Secondly, the majority of people who disrupted the Beijing Olympics torch relay in Western countries were not ethnic Tibetans but white, small-l liberals with anti-communist prejudices, Amnesty International types etc. These same people devote little energy to the Kashmir issue in capitalist India. Thus there have been no big protests in Western countries over the Commonwealth Games being held in India, even though in terms of number of people killed (regardless of the question of which side you take), the conflict in Kashmir is many, many times bigger than the one in Tibet.

In general had India been granted the Olympics there would not have been such a concerted effort to disrupt the torch relay whipped up by the Western capitalist media and backed by the U.S. National Endowment for Democracy and equivalent German organisations. Why? Because India is capitalist and the imperialist bourgeoisies’ accept its murderous occupation of Kashmir. Thus the hypothetical situation that Slee presents would simply not occur in the present world. Indian students in Australia would have no need to defend a torch relay to an Indian-hosted Olympics from mass protests, except possibly to defend it from white supremacists. And this is the point.

Looking at who opposes and who does not oppose a state and for WHAT REASONS gives clues as to the state’s character. Right now, the most organised China-wide anti-government movement, one that has the Western imperialists excited, is called Charter 08 (see http://www.nybooks.com/articles/22210). This Charter 08 petition is modelled on the Charter 77 of Czech anti-communists like Vaclav Havel that would later become the blueprint for the counterrevolutionary destruction of the Czechoslovakian workers state. Obviously in choosing to base themselves on Charter 77, the Charter 08 proponents think that a similar type of state exists in China today as existed in Czechoslovakia in the 1970s-80s. Thus like Charter 77, Charter 08 uses the cover of “democracy” to call for making the military and police “non-partisan” and for purging the judiciary of Communist Party influence. In other words they want to get rid of the explicitly pro-communist ideological and political character of the state apparatus, so that in the then nominally “non-partisan” state institutions the capitalists through their wealth and connections will gain the decisive influence.

Most noteable is Charter 08’s economic policy:
“PROTECTION OF PRIVATE PROPERTY. We should establish and protect the right to private property and promote an economic system of free and fair markets. We should do away with government monopolies in commerce and industry and guarantee the freedom to start new enterprises. We should establish a Committee on State-Owned Property, reporting to the national legislature, that will monitor the transfer of state-owned enterprises to private ownership in a fair, competitive, and orderly manner. We should institute a land reform that promotes private ownership of land, guarantees the right to buy and sell land, and allows the true value of private property to be adequately reflected in the market.”

Hung Ho-Fung, a Marxist writer on China, added an important postscript to my article on the Chinese peasantry (http://www.socialistvoice.ca/?p=584) in his presentation to a Toronto meeting February 5.

The meeting, sponsored by Socialist Project, was entitled “China, Japan, the U.S.: Together in Crisis” and drew an attentive audience of more than 100. Hung is the author of “America’s Head Servant: The PRC’s Dilemma in World Crisis,” in the Nov-Dec issue of New Left Review. (See http://www.newleftreview.org/?getpdf=NLR29401&pdflang=en)

My article reviewed a book (Will the Boat Sink the Water? The Life of Chinese Peasants. By Chen Guidi and Wu Chuntao) chronicling the struggles of Chinese peasants in the 1990s, a period in which they suffered bitter impoverishment due to the exactions of government officials and Communist party cadres. It concluded by noting that in 2005, the Chinese government had abolished taxes on peasants, a move whose effect, my authors said, was not yet apparent.

Hung provided such an assessment. He reported that the abolition of taxes on peasants, together with government moves to rebuild rural health services and an increase in food procurement prices, had in fact resulted in a significant improvement in peasants’ living standards. This shift had measurably decreased the flow of migrant labour to the cities, tightening the labour market. A secondary factor was government moves to strengthen the hand of unions in defending workers’ living standards. The result was a significant rise in wage levels. China’s economy, Hung said, shifted toward development of its internal markets, and away from single-minded concentration on providing low-wage labour for export industries.

In Hung’s opinion, the condition of the peasantry is the key factor in shaping the development of China’s economy. So long as the peasantry is bitterly impoverished, the flood of migrant labour to the cities will press down against urban wages. He raises the question that the campaign against peasants was not just a case of plunder by local officials but a deliberate policy to keep urban wages low. The dual impoverishment of urban and rural working people bears down against the growth of internal markets.

The development of Chinese industry, Hung states, has different from that of Korea and Taiwan in that Chinese workers’ wages have not risen, until the uptick in the last few years. Until the recent uptick, Chinese wages stayed at about 5% of U.S. levels; in Korea, by comparison, wages have risen to 50% of U.S. levels. This is a reflection above all, he states, of power relationships in the countryside, as in the country as a whole. Chinese peasants are uniquely lacking in political leverage with the government. There is much contestation at the grass-roots level, but no way for the pressure to be applied to the government. (In the book I reviewed, Chen and Wu provide many heartrending examples of this fact.) He compares the much greater political leverage of peasants in Taiwan, Korea, and Japan.

Hung supports the demand of peasant advocates in China that there should be a national peasants’ association. Even if government-run, he says, such a body would bring significant improvements.

From what I have written so far, it might seem that China has turned the corner toward what the Venezuelans call endogenous development. In Hung’s opinion, this is not so.

He described the functioning of China’s export economy as a vicious circle in which most of the benefits flow to the U.S. and its imperialist partners. If I may oversimplify his argument, China sells low-cost manufactured goods to U.S. consumers. The Chinese workers receive a bare pittance; the employers rake off high profits; a large part of what remains is handed over to the U.S. government through the purchase of government bonds. China retains titular ownership of these bonds, but cannot withdraw the money, because doing so would run the risk of bankrupting the U.S. government, sinking the dollar, and throwing not only the U.S. but Chinese economy and society into crisis.

(There is also a lack of available alternatives. In his article, Hung describes the embarassing failure of many Chinese efforts to shift money away from U.S. Treasuries.)

To summarize, for China, the U.S. has become “to big to fail” and must be sustained through payment of a tribute of hundreds of billions of dollars.

During the economic crisis, China has bluntly warned the U.S. that it is considering shifting its dollar reserves to other currencies. But it has done nothing of the sort, Hung says. In fact, in the first year of the crisis (2008-09), China’s holdings of U.S. treasury bonds increased by a startling 28%, or, if bank holdings in its Hong Kong possession are included, 35%–from $683 billion to $921 billion: a striking case of throwing good money after bad.

Why does China not break with this policy, which seems so disadvantageous to its economy’s development, I asked during the discussion period. Partly, Hung stated, because China is too far gone to pull back: the regime fears the social turmoil that would result in China if the U.S. is destabilized. Partly, Chinese policy reflects the dominant power over the Chinese government of those owning and running its export industries (the “coastal elite”), who have an effective veto over government policy. Already, they are agitating for measures to curb the rise of wages, with strong support of a Kissinger-backed U.S. lobbying concern. A decisive move in this direction would be to privatize ownership of rural land, opening the door to clearing most peasants off the land and unleasing a renewed flood of migrant labour to the cities.

I encourage readers to download Hung’s important article in New Left Review.